Azure Power Global | The Caisse’s trusted man at the heart of the corruption plot

The trusted man placed by the Caisse de dépôt et placement du Québec at the head of its Indian solar park company would have himself participated in the vast system of corruption and contract sharing for which three of its executives were accused last week.

In September 2021, Azure Power Global – which received more than 600 million from Quebecers – announced the arrival of Alan Rosling as chairman of its board of directors. The Indian company emphasized that he was appointed by the Caisse, its controlling shareholder. Considered an accomplished businessman and pioneer of climate finance in India, he was in principle responsible for ensuring the good governance of the organization.

According to the American stock market watchdog, Rosling instead participated in the plot to pay some US 250 million in bribes to representatives of Indian states. He allegedly acted in concert with Azure’s main rival, the Adani group, whose founder, Gautam Adani, 27^e fortune in the world according to Forbesis close to the Indian Prime Minister, Narendra Modi.

For the nest egg of Quebecers, this story of corruption is added to a series of disasters having undermined its bet in Azure, which is today worth less than 5% of the value of the initial investment. The American authorities are interested in the matter because Azure’s shares were traded on the New York Stock Exchange, before being delisted in July 2023.

A New York prosecutor unveiled, on November 20, a series of criminal charges against eight people, including three former executives of the Caisse and two ex-CEOs of Azure whom they had put in place.

Mr. Rosling is not one of them, but he nevertheless finds himself implicated in this matter, according to a civil complaint from the Securities and Exchange Commission (SEC). The document primarily targets the former vice-president, infrastructure for Asia-Pacific, at the Caisse, Cyril Cabanes.

In the first months of his mandate, Rosling had no significant role to play in suspicious contracts or in discussions with Adani, according to the American stock market watchdog. “That changed in spring 2022,” however, underlines his complaint.

On April 29 of that year, Rosling attended a meeting with the head of its competitor, the Adani group. On this occasion, “we read aloud to him the complete list of bribes promised or paid to representatives of Indian states,” mentions the SEC.

These payments were intended to convince authorities to sign contracts to buy 12,000 megawatts of solar electricity. A third of them were to go to Azure. The Adani family had already agreed to pay all the bribes to corrupt Indian representatives, as part of a market sharing agreement.

During the meeting with Rosling, “Gautam Adani sought to collect Azure’s share of the bribes, which amounted to tens of millions of dollars,” specifies the SEC.

He is considering “a feasible transaction”

Far from sounding the alarm, Rosling instead put his hands to work to find a way to conclude “a feasible transaction”, in the words that the vice-president of the Caisse Cyril Cabanes would have used.

While an internal investigation was in full swing in the summer of 2022 into potential embezzlement at Azure, Rosling and Cabanes “took steps to hide information about the bribes from executives at Azure and the company. Fund,” the SEC wrote.

The organization specifies that Rosling and Cabanes would have “agreed with other people at the Caisse and at Azure to agree on a false story”. They even allegedly lied to Azure’s internal investigators and lawyers.

Instead of paying its share in cash, Azure ultimately transferred its largest solar farm contract to Adani in 2023 under a false motive, says the SEC. “The resulting transaction resulted in a significant transfer of value from Azure to Adani. »

Investigations launched in India finally got the better of the last contract that Azure had kept.

The company suddenly announced Rosling’s resignation on October 12, 2023, an effective departure the day before the announcement. The statement did not mention any thanks for his services or the reasons for his ejection.

“More than shocking”

Former analyst at the Caisse and author of the blog Pension Pulse on retirement plans, Leo Kolivakis said he was stunned by the content of the SEC’s complaint.

“It’s more than shocking,” he wrote on his blog. You just can’t make this stuff up. It should be made into a Hollywood blockbuster because it’s so serious. »

Radio silence at the checkout

Since the opening of its office in New Delhi in 2016, the Fund has bet 9 billion on India. Its three former executives accused of corruption were all employees of the Quebec institution in this region of the globe between 2018 and 2023.

How many investment cases have they been involved in? Has the Caisse established a process to ensure that its three former executives accused of criminal offenses have not committed other acts of embezzlement over these years?

Impossible to know. Despite the requests of The Pressthe Fund refuses to offer details.

“We are committed to the highest standards of ethics and compliance and no compromise is made on these issues,” its spokesperson, Jean-Benoît Houde, wrote in an email. We are talking here about three isolated cases, which concern individuals dismissed more than a year ago. »

Difficult to comment without additional information, judge Nicola Bonucci, associate professor at Paris Cité University and former director of legal affairs at the Organization for Economic Co-operation and Development (OECD). In this capacity, he monitored the application of the Convention on Combating Corruption in member countries.

“In absolute terms, the question that arises is whether the people in question acted autonomously or with the at least tacit consent of management,” he said.

He adds that if executives were able to act by circumventing internal compliance controls, “this should lead the company to question the effectiveness of its programs.”